The Curious Irrelevance of Inequality

by Will Wilkinson on April 7, 2008

Here’s a fascinating post by Don Arthur at Club Troppo that asks how would a “progressive fusionist” answer the question “How much inequality is too much?” It turns out that my “Rawlsekianism” is an example of progressive fusionism. And Arthur rightly says:

From this perspective, it’s not possible to decide on a correct distribution in advance. That’s because the question isn’t a purely philosophical one. On its own, Rawls’ theory doesn’t tell you what shape the income distribution should be.

The income distribution among a selected group of people (are you sure the residents of a country compose the right group of people?) is a pattern. The same pattern can in principle be determined by many different mechanisms. The pattern that emerges from an unimpeachably just set of rules and one created by violence, theft, corruption, and oppression might turn out the have the same Gini coefficient, which is how you know that Gini coefficients convey approximately zero information of normative significance.

No shape is the right shape. If perfect equality is achieved through expropriation, then one might be tempted to say that there is too little inequality, but the problem is really too much confiscation, too much abuse of illegitimate authority, too little respect for rights. Likewise, if high levels of inequality are generated by the predation of an elite class, as is the case in much of the world, one might be tempted to say that there is too much inequality, but the problem is really rampant criminality, of which inequality is a side-effect. If I burn down your house, the problem is not that housing inequality has increased. The problem is that I have burned down your house. And when scholars tell us that inequality tends to be negatively correlated with economic growth, they are telling us, in an oddly roundabout way, that theft and corruption are not the path to prosperity.

There is no “too much” inequality. If there is any injustice or wrongdoing, it is too much. You don’t have to wait until you observe inequality to start caring about them — as if the smoke was the problem with a house on fire. But if a pattern of incomes is the result of fair-dealing among free people acting within just institutions, then there can be little objection, except from those who make equality a pointless fetish. Poverty is bad, whether or not it is a consequence of injustice, whether or not it exists alongside wealth, and the fact that it is bad alone gives us sufficient reason to do something about it.

  • From a slightly different direction--are you at all worried about how inequality might matter as an *input* into injustice, rather than an outcome of it? In an earlier post you're willing to take cognizance of cultural threats to autonomy; is there no parallel worry about extreme levels of inequality creating a culture of entitlement and privilege, on the one hand, and slavishness and resentment, on the other?
  • MDM
    On the one hand, your comments echo David's Schmidtz's point about humanitarianism vs egalitarianism: the reason to help fix cleft palates is that cleft palates are bad, not that there is an unequal distribution of them.
    On the other hand, insofar as society is seen as a "cooperative venture for mutual advantage" (isn't that Rawls's phrase?) shouldn't we worry when the least well off are not benefitting as much as they could be from growth? How sustainable is this positive sum venture if the poor realistically believe they could be better off with some other arrangement?
    Like the others, I'm not yet seeing much Rawls in your Rawlsekianism.
  • Jacques Chester
    If I burn down your house, the problem is not that housing inequality has increased. The problem is that I have burned down your house.


    That's a suggestive way of putting things. In physics perfect equality of temperature is the heat death; all useful energy has been used up and further change is impossible.
  • Grant Gould
    Can you rescue inequality perhaps by pointing out that confiscatory redistribution, the burning down of houses, and so forth are a form of inequality, and a particularly pernicious one at that?
  • Dan
    Yeah this seems oddly like not-Rawls-at-all. You don't believe in deontological absolute rights, so why is "any injustice" too much?
  • Didn't Nozick say all this in ASU as a rebuttal to Rawls, or am I getting him confused with Hayek?
  • KJ
    I can agree with this but I think it important to point out that poverty is defined at an absurdly low level. It's $21,200 for a family of four (2006). Government aid and EIC certainly adds to that but it hardly pushes income to a level I find minimally acceptable.

    As a liberal who often fetishizes inequality, I'm happy to drop it so long as we discuss poverty realistically. I imagine if we laid it out, a true minimum after tax income for a family of 4 should be no less than 50K in most urban areas, perhaps a bit less elsewhere. This is roughly the median income for a family of 4 now so we have quite a bit of work to do.

    If Health Insurance were part of the deal, that could probably be lowered. My family health insurance costs my employer and me about $13,000 a year. Quite a ridiculous number if you think about it.
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